The Ouroboros of Neoliberalism

Introduction

The years between the end of World War II and the economic crises of the 1970s were, needless to say, far from ideal. The catastrophic creation of the state of Palestinian oppression and suffering (opposed by many Jews [including leftist Israelis], and supported by many non-Jews), aided in part by an otherwise normally anti-Zionist USSR that–as soon as they realized Israel wasn’t going to be socialist–quickly repented and showed firm solidarity with the Arab people, is one example of the bad things that happened then. There are, of course, many others.

Consider the many CIA-aided coups of left-leaning governments over the years, including those of Iran, Guatemala, and Chile. Consider the merciless bombing of North Korea in the early Fifties; the constant fear of nuclear war; the Gulf of Tonkin lie that gave the US the excuse needed to engage more directly in the Vietnam War; the killing of 500,000-1,000,000+ Indonesians in an anti-communist purge to replace Sukarno with Suharto; and Kissinger’s idea for the bombing of Cambodia. These are but a few examples of all the evil that occurred from 1945-1973.

Still, in spite of these many problems, it can be reasonably argued that there was much reason for hope back then, hope that the world would one day be liberated from the oppression of capitalism and imperialism. The Soviet Union, though flawed in general and weakened by Khrushchev, continued to be an effective counterweight to imperialism, giving aid to national liberation movements in the Third World. The Cuban Revolution, handcuffed as the island was and has been by the US embargo, transformed a Third World dictatorship of the bourgeoisie into one of the proletariat, providing near-universal housing and generally among the lowest of unemployment rates, with free education, and the best healthcare system in the developing world.

Even in the capitalist West, left-leaning concessions were made, providing stronger unions, better wages, and higher taxes for the rich. This was done merely to appease the working class and to stave off communist revolutions in the First World, of course, but for what it was worth, it was a damn sight better than the neoliberal cesspool we’re stuck in today, ruled by narcissists and psychopaths.

Nothing ever stays in the same state. All things flow, like the waves of the ocean. Those relatively good times shifted counter-clockwise–that is, we’ve been going backwards on the counterrevolutionary clock I call the ouroboros of capital (pardon the mixed metaphor), starting in the mid-70s and continuing to the present day.

The Myth of the ‘Free Market’

Right-libertarian ideologues like to claim that unregulated capitalism, by freeing business owners of taxation, allows them to reinvest, create jobs, and grow the economy. The state, they claim, is like a ball and chain, stifling economic development with its taxes and pesky regulations.

If this is true, though, then how did China (a political system of Socialism with Chinese characteristics, or one of state capitalism, a kind of arrested NEP development?) grow into one of the strongest economies in the world, with its state-planned economy? Similarly, the countries in Europe, including those of the Nordic Model, largely with social democratic market economies, showed larger growth in 2007 than did the more free-market-oriented US during that time (see Chang, pages 104-105).

Of course, the free market fundamentalists like to guffaw at the labelling of the US as capitalistic in any sense, especially “free market” capitalist, since the mere existence of a government, with its taxes and regulations, apparently precludes any possibility of there being an American free market. Supposedly, Democrats like the “socialist” Obama had something to do with this putting of capitalism into a “communist” straitjacket.

Actually, there is no one objective definition of the “free market,” Ha-Joon Chang observed. One cannot have capitalism without a centralized state to protect private property, and what does a government do, if it doesn’t make regulations and collect tax revenue to function as it needs to do?

The market fundamentalists’ notion of “free market” capitalism, as opposed to a state-planned economy, is more of an idealized abstraction than an actually existing thing. It sounds good on paper, but when it’s actually implemented, something quite different happens…

Generally, right-libertarians–as opposed to the “anarcho”-capitalists, whose brains are in outer space–acknowledge the need for at least some state involvement, to the extent that it protects private property, but they’ll allow for no more than that. If, as Chang noted, there’s no standard definition of the “free market,” then where do we draw the line between ‘acceptable’ and ‘unacceptable’ levels of state impingement in the market? Here we have the continuum fallacy.

Speaking of continua, I have a way of representing how the dialectical relationship between the “free market” and a state-planned economy can be understood. As I’ve written elsewhere, the ouroboros can symbolize a continuum coiled into a circle, with the serpent’s biting head (e.g., the “free market”) as one opposite meeting and phasing into the other opposite (e.g., state planning), the serpent’s bitten tail.

Going Counter-Clockwise Along the Ouroboros

What right-libertarians fail to understand is that capitalism is a process, a growing, developing, evolving entity, not some fixed, static, unmoving thing. As David Harvey observed:

‘Capital is not a fixed magnitude! Always remember this, and appreciate that there is a great deal of flexibility and fluidity in the system. The left opposition to capitalism has too often underestimated this. If capitalists cannot accumulate this way, then they will do it another way. If they cannot use science and technology to their own advantage, they will raid nature or give recipes to the working class. There are innumerable strategies open to them, and they have a record of sophistication in their use. Capitalism may be monstrous, but it is not a rigid monster. Oppositional movements ignore its capacity for adaptation, flexibility and fluidity at their peril. Capital is not a thing, but a process. It is continually in motion, even as it itself internalizes the regulative principle of ‘accumulation for the sake of accumulation, production for the sake of production.”’ –David Harvey, A Companion to Marx’s Capital, page 262

For the past 100-130 years, capitalism has been in its highest stage, imperialism. It’s no longer just an industrial phenomenon, with Mom-and-Pop stores ‘innocently’ selling things to people. It’s called capitalism because it involves the accumulation of capital, which leads to centralization.

Industrial cartels merged with banks, resulting in finance capital and monopolistic businesses’ and the great powers’ division of the booty of the developing world. When markets dried up locally, capitalists had to go abroad to expand their businesses as a way to offset the tendency of the rate of profit to fall (TRPF).

Capitalism is competition, but it needn’t (and generally mustn’t) be a fair fight. Capitalists’ greatest enemies aren’t necessarily socialists, but they are very often other capitalists. “One capitalist always strikes down many others” (Marx, page 929), so please, right-libertarians, stop all this blather about the “free market” bringing about a “level playing field.”

Back during the years of the Scramble for Africa and afterwards, the monopolistic companies found themselves competing for the largest slices of the market in the conquered countries of the world–hence the capitalist form of imperialism. This is why World War I happened, as Lenin observed. It’s also why the US and Europe have been competing against Syria, Russia, and Iran over who will profit over a gas pipeline to be built through Iran, Iraq, and Syria.

Right-libertarians claim that these wars are the fault of the state, rather than capitalism’s use of the state. They are deluding themselves with their masturbatory invisible hands.

In the 1980s, Reagan spoke of “smaller government,” as did the Koch brothers (who still do, of course!). What they’ve actually wanted is more government in the service of the bourgeoisie, and less government for the people. They’ve gotten what they wanted.

Reagan busted unions, deregulated, and lowered taxes for the rich (as did Thatcher). His administration also expanded the state (i.e., the military-industrial complex that Eisenhower warned not to allow to grow) with the arms race and the capitalist class’s efforts to win the Cold War. The biting head of the “free market” led to the bitten tail of a stronger imperialist, bourgeois state.

George HW Bush wanted to sign NAFTA into law, but couldn’t, because of liberal misgivings about it. It took charming Bill Clinton to negotiate and persuade liberals into allowing NAFTA to be signed. The biting head of conservatism was too much for ‘left-leaning’ people of the time to accept (though ‘left-leaning’ people today would allow neocon and neoliberal legislation with barely a peep of protest, because opposing Trump is the only thing that matters to them), but a counter-clockwise revolution along the serpent’s body, from the liberal tail to the conservative head, was permissible.

Conservatives learned (but never publicly acknowledged, of course) that the Clintons, right-wing wolves in ‘left-leaning’ sheep’s clothing, were their best friends when they helped ruin Russia (by shoving capitalism down her throat), kill Welfare, and, by deregulating the converging broadcasting and telecommunications markets, allow mergers and acquisitions in the media. All “free market” stuff, courtesy of the state. More counter-clockwise counterrevolution along the body of the ouroboros.

Replacing socialist Yugoslavia with the “free market,” and done in the bloodiest way (the biting head of capitalism), led to the creation of a huge NATO base in Kosovo (the bitten tail of an expanded, imperialist state).

In today’s imperialist world, the power of the state is not a simple matter of each country being run by its own government. Transnationalism has led to multinational think tank organizations (such as the Atlantic Council, a NATO adjunct that just made a sweet deal with Facebook to monitor “disinformation campaigns” [translation: censor social media], the IMF, the World Bank, and the WTO), as well as capitalist globalization, which means multinational corporations can take advantage of deregulation and free trade to have cheap labour make their products abroad.

To prevent proletarian defiance of this unaccountable corporate tyranny, military bases get set up in the exploited, poorer countries, as has recently been done in Argentina by the US. The biting serpent’s head of the globalizing free market leads to the bitten tail of ever greater state intervention, in the form of foreign armies.

The US government never blushes about building up a huge deficit with its unbridled military spending, yet also giving tax cuts to the rich, thus depriving themselves of the kind of funding that could pay off that deficit. Meanwhile, Flint, Michigan has been without clean water for ages, yet the US military, which is like a huge employment agency for people who can’t find work elsewhere, get to play with the highest-tech toys.

Consider how George W. Bush et al started the “War on Terror” to justify the plunder of Iraq for oil and Afghanistan for such things as heroin, while cutting taxes for the rich and establishing TARP; Obama continued and expanded these depredations and socialism for the rich, capitalism for the poor, as has Trump. The free market and an expanded state go hand in hand.

The Freer the Markets, the Greater the Cronyism

The main thing refuting the right-libertarian notion of a dichotomy between the “free market” and “corporatism” is how lowering taxes for the rich and deregulating to allow more corporate profits actually results in the very cronyism that the “free market” is supposed to free us of.

Lowering taxes and deregulating to allow higher profits, to allow the rich to get richer, do not result in huge waves of job creation or economic growth. First of all, many jobs are outsourced to Third World countries (the Trump administration has not reversed this problem for American workers, nor does Trump hire only Americans; Ivanka’s clothes, incidentally, are also made in sweatshops in such countries as Indonesia and China), for the sake of getting cheap labour. Second, a huge portion of that extra money is put into offshore bank accounts, as the scandals of the Panama and Paradise Papers have shown. Third, and most importantly, much of that extra wealth is used to buy politicians.

As I stated above, capitalists are often the worst enemies of other capitalists; the big ones strike down the smaller ones. The state is a big help in doing this striking down, and allowing the big capitalists to get bigger, through tax cuts and deregulation, is another such great help.

Why would a big capitalist’s “rational self-interest” go along with a “level playing field” if he has the money to buy favours from the government in order to enjoy an unfair advantage over small capitalists? When capitalists lose in competition, they don’t just shrug their shoulders, chuckle, and say, “Oh, well, that’s the way the ball bounces in the good ol’ free market.” They cannot allow themselves to lose, and they’ll use every dirty trick they can to ensure they win, including getting government favouritism.

All these recent presidents–from Reagan to the Bushes, and the Clinton and Obama “New Democrats,” rivals of the right–have demonstrated how “free market” deregulation and tax cuts allowed the rich to be rich enough to buy, essentially, the entire US government, both political parties, and ensure that the military-industrial complex works only for them. American politicians hunt for funding in the millions to get Super PACs: we all know which classes they’re approaching, and which classes they’re ignoring, because only the rich can provide such gargantuan funding.

This bias in favour of the rich has always been a problem, of course, but it has gotten progressively worse over the past thirty to forty years, all thanks to the Reagan counterrevolution. The “free market” biting head leads to the bitten tail of more cronyism, which on the one hand wants regulations to benefit the rich in one set of ways, then more deregulation and tax cuts to benefit them in other ways. This means a counter-clockwise move along the ouroboros’s body back up to its head, then past the head to the tail in a repeat of the cycle…a downward cycle.

While these counter-clockwise cycles are happening again and again, the right-wing propagandists at the Cato Institute, the Mises Institute, etc., are shouting that the problem is the state, and that its dissolving, or at least its minimization, will free up the “free market,” and all will be well. Actually, all they’re promoting is an acceleration of the downward neoliberal spiral described in the preceding paragraph.

The propaganda has confused the problem. Instead of acknowledging two kinds of government, a bourgeois state and a workers’ state, the two are conflated into one. According to right-libertarian ideology, all states–fascist, social democratic, centrist mixed economies, bourgeois liberal, and of course communist–are the same, or at least variations on the same tyrannical, totalitarian model. Anti-Stalin propagandists like Orwell and Djilas have been helpful to the right, whether they’d intended to or not.

Conclusion

The right-libertarians have an absolutist, black-and-white kind of thinking because they don’t understand dialectics, how a unity of opposites shows that contradictions can be resolved and sublated to form higher levels of truth. In fact, irony of ironies, the very withering away of the state that the right-libertarians crave so much (or merely claim to crave) can be achieved only through communism. Here’s the formula, for the sake of simplification: thesis–bourgeois state, deregulated; negation–proletarian state, regulated; sublation–no class differences, no need for regulation, because the state, being no longer necessary to suppress one class for the sake of the other, has died out by itself.

Going from the thesis–as painfully apparent as it is in today’s world–to its negation, a situation comparable to the 1945-1973 period described above in the introduction, will require a ruthlessness that would make Stalin seem a softie in comparison. For recall all the horrors I described at the beginning of this essay; defence against such imperialist horrors will require a powerful workers’ state. Gorbachev’s weakening of that state lead to Yeltsin’s faux democracy, and an unleashing of the neoliberal agenda, a letting slip of the capitalist dogs of war.

I say, no war but the class war…and we socialists must fight it to end it, because the capitalist class intends to fight unendingly…